Estate planning is a responsibility that many people place on the back burner. Clearly, contemplating your own mortality may not be the most pleasant pastime in the world, but you should confront this reality head-on and take steps to protect your family.
If you do not look into the subject thoroughly, you may assume that you should use a last will as your asset transfer vehicle. For some people with very simple situations, a will could suffice, but there are many other options. A will is not always going to be the best choice.
Revocable Living Trusts
A revocable living trust can be more preferable when certain circumstances exist. First, you should understand the fact that you do not surrender control of assets that you convey into this type of trust. You have the power of revocation, so you can dissolve the trust entirely at any time.
While you are living and competent, you can act as the trustee, so you administer the trust yourself. To facilitate asset transfers after you are gone, you name a successor trustee to take on the responsibility after your passing.
The trustee would be able to distribute assets outside of probate. When a will is used, it must be admitted to probate with limited exceptions for small estates, which is a time-consuming and expensive legal process.
When you have a living trust, you can include spendthrift protections; you do not have to allow for lump sum inheritances, and this is another benefit.
Advanced Estate Planning Objectives
There are other types of trusts that can be utilized if you have more advanced estate planning objectives. For example, high net worth individuals can be exposed to estate taxes, and asset protection can be a concern as well. Certain types of irrevocable trusts can be used for tax efficiency and/or asset protection purposes.
Nursing Home Asset Protection
Nursing home asset protection can also enter the picture. Many senior citizens will need help with their activities of daily living at some point in time, and Medicare does not pay for custodial long-term care.
Since long-term care is very expensive, you could wind up with little left to leave to your loved ones if you have to pay for an extended-stay in a nursing home out of your own pocket.
Medi-Cal is another government program that does pay for long-term care under certain circumstances. Though it is a need-based program, if you take the right steps, you may be able to obtain eligibility at the right time without losing anything in the process. For veterans and surviving spouses of veterans, there also may be benefits available through the VA, although it usually takes expert assistance to navigate the VA maze.
Our Firm Can Help
We have provided some food for thought in this brief blog post. If you would like to discuss your own unique estate planning objectives with an experienced and qualified estate planning attorney, feel free to contact us through this page to schedule a consultation: Sacramento CA Estate Planning Attorneys.